Cliffs Communities Emerge From Bankruptcy

On Aug. 27, 2012, The Cliffs Communities emerged from Chapter 11 bankruptcy proceeding like a proverbial phoenix, thanks to its new owners, Silver Sun Partners, LLC.

In February 2012, Cliffs Club & Hospitality Group, Inc., which owns the Cliffs Communities golf courses and amenities, had filed for Chapter 11 protection. According to court documents, it listed more than 10,000 creditors, with assets of $175 million and liabilities totalling $333 million. When the housing market softened several years ago, Cliffs developer Jim Anthony went hat-in-hand to investors and property owners in an effort to raise capital, but soaring debts due to several factors, including the downturn in the housing market, led to foreclosure complaints on more than 200 Cliffs properties that totalled in excess of $40 million. Over-zealous expansion on the part of Jim Anthony, founder of the Cliffs, along with the downturn in the economy and its impact on luxury real estate, negatively impacted the Cliffs overall financial position.

Ironically, one of the property owners who helped Anthony financially proved to be one of Cliffs’ saviors. Steve Carlile of Marshall, Texas, a self-made millionaire, announced shortly after the bankruptcy filing that his Carlile Group was working with other investors on a post-bankruptcy rescue plan. A partnership was formed involving The Carlile Group; Arendale Holdings, a real estate investment and development company specializing in residential communities and golf course operations; and SunTx Urbana, a real estate management and development company. They called the collaboration Silver Sun Partners, and took their dream directly to property owners, via e-mails, "snail-mail" packages, and "road shows," visiting each Cliffs community and urging support of the plan.

The new partnership “committed significant capital resources that will create immediate stability within the clubs while preserving and enhancing real estate values within The Cliffs Communities”, according to a news release sent to media the day the bankruptcy court judge approved the plan. Work on amenities – which had been halted due to the bankruptcy – will now resume, the release said. Silver Sun Partners "will begin club operations under the management of its subsidiary, Cliffs Club Partners, LLC, while leveraging real estate sales and marketing programs through another subsidiary, Cliffs Land Partners, LLC," the release added.

Steve Carlile, a Silver Sun Partners board member, said in the release, “We want to express our sincere gratitude to the members, management team and employees who have helped shape the future direction of the clubs. Your patience and cooperation throughout this challenging process has allowed us to reorganize in a way that positions The Cliffs to emerge as the preeminent luxury golf and wellness community in the country.”

Katie Goodman, managing partner of GGG Partners, LLC, who has been serving as chief restructuring officer for The Cliffs Club and Hospitality Group, added, “The collaborative effort of the Silver Sun partnership and the various stakeholders resulted in a swift resolution to an extremely complex transaction. I am confident that Silver Sun provides the depth of capital and management experience to best position The Cliffs for the future.”

The Cliffs Communities include three developments near Greenville, SC; The Cliffs at Valley and The Cliffs at Glassy – two seasoned communities with all amenities in, north of Greenville. The Cliffs at Mountain Park, is a newer development, not yet with completed amenities. Three Cliffs Communities at Lake Keowee, SC; The Cliffs at Keowee Vineyards, The Cliffs at Keowee Falls, and the newest Cliffs community at the lake – The Cliffs Springs, which is awaiting completed amenities. Two Cliffs communities near Asheville, NC; The Cliffs at Walnut Cove and The Cliffs at High Carolina, an incomplete development, just east of Asheville.

Silver Sun has established Cliffs Club Partners, LLC, and Cliffs Land Partners, LLC, respectively, to manage club operations and real estate sales, marketing and development. Collectively, the partnership delivers industry-leading expertise in private club operation and luxury real estate development. Silver Sun Partners expects to announce additional operational and real estate updates in the near future.

We look forward to seeing what Silver Sun Partners has in store for the Cliffs Communities going forward. Southeast Discovery will continue to report on this transition of ownership at the Cliffs and hope to see productive effort on behalf of these seven Western Carolina communities.

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